Post tender negotiation (PTN) is defined by the Office of Government Commerce as:
"Negotiation after receipt of formal bids or tenders and before the letting of contract(s) with those companies submitting tender(s) offering the best value for money with a view to obtaining an improvement in content in circumstances which do not put the other tenderers at a disadvantage, distort competition or affect adversely trust in the competitive tendering process."
For the OGC guidance on PTN, please click here.
- PTN should not be used to conduct a ‘Dutch auction’ between the bidders or to distort competition. It should be used in moderation and only where there is an opportunity to lower prices and improve other aspects of the submissions.
- PTN should only be undertaken with the one or, perhaps, two bidders offering the best submissions under the stated award criteria.
- PTN should involve your institution’s Head of Procurement (or nominee) and thorough preparation should be undertaken before starting.
- A detailed record should be kept of the PTN process, from the reasons and decision to undertake the negotiations; the negotiations themselves and the eventual outcome. These records will form part of the audit trail and could be subject to scrutiny by Audit (internal and external) and could be made public should there be a successful complaint from an unhappy bidder.
EU tenders
Under the EU procurement rules apart from the competitive dialogue and negotiated procedures, there is little scope for negotiation especially in respect of the open or restricted procedures. Great care must therefore be taken. In general, negotiations should only be undertaken with the preferred bidder (ie the one you intend awarding the contract to). Only if there is a complete breakdown in the negotiations and the preferred bidder no longer has that status, would you enter into negotiations with the next bidder as scored (ranked) during the evaluation process.
Note: In the higher value procurements, especially EU tenders, PTN should only be undertaken, with the involvement or approval of the institution’s Head of Procurement.
A risk assessment is provided.
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